Section 2
A Growing Economy
Guide to Reading
Big Ideas
Economics and Society The United
States experienced stunning economic
growth during the 1920s.
Content Vocabulary
• mass production (p. 368)
• assembly line (p. 368)
• Model T (p. 368)
• welfare capitalism (p. 374)
• open shop (p. 374)
Academic Vocabulary
• disposable (p. 370)
• credit (p. 372)
People and Events to Identify
• Charles Lindbergh (p. 372)
Reading Strategy
Organizing As you read about the
booming era of the 1920s, complete a
graphic organizer to analyze the causes
of economic growth and prosperity in
the 1920s.
Industry
Society
I
n the 1920s widespread ownership of automobiles,
radios, and other innovations changed how
Americans lived. The Coolidge administration encouraged business growth and tried to promote stability in
international affairs.
The Rise of New Industries
MAIN Idea Mass production and the assembly line allowed new industries, such as automobile and airplane manufacturing, to grow.
HISTORY AND YOU How would businesses, governments, and your family
be affected if air travel did not exist? Read to learn how the transportation
industry changed during the 1920s and 1930s.
By the 1920s, the automobile had become an accepted part of
American life. In a 1925 survey conducted in Muncie, Indiana, 21 out
of 26 families who owned cars did not have bathtubs with running
water. When asked why her family decided a car was more important
than indoor plumbing, a farm wife explained, “You can’t ride to town
in a bathtub.”
The automobile was just one part of a rising standard of living that
Americans experienced in the 1920s. Real per capita earnings soared
22 percent between 1923 and 1929. Meanwhile, as Americans’ wages
increased, their work hours decreased. In 1923 U.S. Steel cut its daily
work shift from 12 hours to 8 hours. In 1926 Henry Ford cut the
workweek for his employees from six days to five, and International
Harvester, a maker of farm machinery, instituted an annual two-week
paid vacation for employees. These changes took place because mass
production, or large-scale manufacturing done with machinery,
increased supply and reduced costs. Workers could be paid more and
the consumer goods they bought cost less.
The Assembly Line and the Model T
First adopted by carmaker Henry Ford, the moving assembly line
divided operations into simple tasks and cut unnecessary motion to a
minimum. In 1913 Ford installed the first moving assembly line at his
plant in Highland Park, Michigan. By the following year, workers
were building an automobile every 93 minutes. Before, the task had
taken 12 hours. By 1925 a Ford car was rolling off the line every
10 seconds. Ford was the first person to build factories based on the
concept of the assembly line.
Ford’s assembly-line product was the Model T—affectionately
called the “Tin Lizzie” or “Flivver.” In 1908, the Model T’s first year,
368 Chapter 10 The Jazz Age
The Car Changes America
Many industries that were needed to build cars prospered. Car manufacturers needed steel for the car body,
glass for the windows, and rubber for the tires. The
automobile also led to changes in society. People moved
to the suburbs, but were less isolated from the benefits
of the city. At the same time, there was a decline in
mass transportation such as railroads and trolleys.
▲ Cars greatly increased
the demand for oil,
leading to a boom in the
oil business, as shown
by the forest of oil wells
in Signal Hills, California
in 1930. To keep cars
refueled, roadside gas
stations sprang up across
the country.
▲
▲ Cars allowed people greater mobility
and freedom. These young women drove
to the country to have a picnic.
The auto industry
spurred a boom in
other industries, as
well. These workers at
Goodyear Tire and
Rubber in Akron, Ohio,
are removing car tires
from curing pits.
Analyzing VISUALS
1. Determining Cause and Effect How did the automobile help other industries grow? Which industries were
most affected?
2. Drawing Conclusions Based on the images above, how
did the car change people’s lives?
it sold for $850. In 1914 mass production
reduced the price to $490. Three years later,
improved assembly-line methods and a high
volume of sales brought the price down to
$360. By 1924 Model Ts were selling for $295,
and Ford sold millions of them. His business
philosophy was: lower the cost per car and
thereby increase the volume of sales.
The low prices made possible by Ford’s
mass-production methods not only created an
immense market for his cars but also spawned
imitators. By the mid-1920s, other car manufacturers, notably General Motors and
Chrysler, competed successfully with Ford.
The auto industry also spurred growth in other
industries, such as rubber, plate glass, nickel,
and lead. The auto industry alone consumed
15 percent of the nation’s steel and led to a
huge expansion of the petroleum industry.
High Wages for Workers Ford also
increased his workers’ wages in 1914 to $5 a
day (doubling their pay) and reduced the
workday to eight-hour shifts. Ford took these
dramatic steps to build up workers’ loyalty
and to undercut union organizers.
Chapter 10 The Jazz Age 369
(br)The Granger Collection, New York
There were strings attached, however. Ford
created a “Sociological Department,” which
set requirements workers had to meet. For
example, renting space in one’s home to
nonfamily members was strictly forbidden.
Investigators visited employees’ homes to
verify their eligibility and workers who broke
the rules could be disqualified from extra pay,
suspended, or even fired.
The Social Impact of the Automobile
Cars revolutionized American life. They eased
the isolation of rural life and enabled more
people to live farther from work. An entirely
new kind of worker, the auto commuter,
appeared. Since commuters could drive from
their homes in suburbia to their workplaces,
other forms of urban transportation, such as
the trolley, became less popular.
Consumer Goods
In response to rising disposable income,
many other new goods came on the market.
Americans bought such innovations as electric
TECHNOLOGY
razors, facial tissues, frozen foods, and home
hair color.
Companies created many new products for
the home. As indoor plumbing became more
common, Americans’ concern for hygiene led
to the development of numerous household
cleaning products. By appealing to people’s
health concerns, advertisers convinced homemakers to buy cleansers in hopes of protecting
their families from disease.
New appliances advertised as labor-savers
changed the home. Electric irons, vacuum
cleaners, washing machines, and refrigerators
changed the way people cleaned their homes
and prepared meals.
Another lucrative category of consumer
products focused on Americans’ concern with
fashion and youthful appearance. Mouthwash,
deodorants, cosmetics, and perfumes became
popular products in the 1920s.
Birth of the Airline Industry
In the early 1900s, many people were trying
to build the first powered airplane that could
& HISTORY
Labor- and Time-saving Machines The technology of the
1920s changed the way many people lived. Applying electric
motors to items such as washers, dryers, food mixers, and
refrigerators revolutionized household tasks. Improved technology helped raise many Americans’ standard of living.
▲
Electric Appliances
Save Time and Labor
Assembly Lines
Reduce Prices
The moving assembly line
and standardized parts
made auto assembly fast,
efficient and cheap. As a
result, most Americans
could afford to buy a car.
370 Chapter 10 The Jazz Age
(4)Ohio Historical Society
New electrical appliances changed life for
the growing middle class that could afford
them. Refrigerators, such as the 1926
Kelvinator (above left) made it practical
to buy and store larger quantities of food.
The electric washer with hand wringer
(above center) and the vacuum cleaner
saved cleaning time. The Air-Way Sanitizor
vacuum cleaner (above right) was the first
to have a disposable bag.
carry a human being. Samuel Langley, secretary of the Smithsonian Institution, was perhaps best known for his attempts at the time.
Langley had built small model airplanes
powered by steam engines, and the War
Department had awarded him $50,000 to build
an airplane that could carry a person. On
December 8, 1903, Langley demonstrated his
plane to government officials in Washington,
D.C. Unfortunately, his plane broke apart on
takeoff and crashed into the Potomac River.
The War Department, in its final report on
the Langley project, concluded that “[W]e are
still far from the ultimate goal, and it would
seem as if years of constant work and study by
experts, together with the expenditure of thousands of dollars, would still be necessary before
we can hope to produce an apparatus of practical utility on these lines.”
Nine days later, Wilbur and Orville Wright,
two inventors from Dayton, Ohio, tested the
airplane they had built using only $1,000 of
their personal savings. The Wright brothers
had carefully studied the problems of earlier
airplanes and had designed one with better
wings, a more efficient propeller, and a strong
but very light engine. On December 17, 1903,
at Kitty Hawk, North Carolina, Orville made
the first crewed, powered flight in history.
After the Wright brothers’ successful flight,
the aviation industry began developing rapidly.
Leading the way was American inventor Glenn
Curtiss. Curtiss owned a motorcycle company in
Hammondsport, New York. Fascinated by airplanes, he agreed in 1907 to become director of
experiments at the Aerial Experiment Association, an organization that Alexander Graham
Bell founded. Within a year, Curtiss had invented
ailerons—surfaces attached to wings that can be
tilted to steer the plane. Ailerons made it possible to build rigid wings and much larger aircraft.
They are still used today.
Curtiss’s company began building aircraft
and sold the first airplanes in the United States.
The company grew from a single factory to a
huge industrial enterprise during World War I,
as orders for his biplanes and engines flooded
in from Allied governments. Although Curtiss
retired in 1920, his inventions made possible
the airline industry that emerged in the 1920s.
Airlines Speed Travel
The aviation industry developed quickly
after the Wright brothers’ first successful
flight in 1903 (above). Below, passengers
are shown boarding a Northwest Orient
Airlines Ford Tri-motor. Although seating
was cramped (right), passenger airlines
carried increasing numbers of people in
the 1920s.
▲
Radio Links the Nation Together
Commercial radio grew rapidly in the
1920s. It helped create a national community as people across the country could
listen to the same music, sports, news,
and entertainment programs. The technicians shown at right are preparing for the
first NBC radio show, which was broadcast in 1926.
Analyzing VISUALS
1. Making Connections Which of the inventions pictured is most important to your life?
Which do you think is most important to the
nation as a whole?
2. Making Generalizations How have
advances in transportation and communication changed life in the United States in the
past 100 years?
Chapter 10 The Jazz Age 371
(bl)Minnesota Historical Society
After Curtiss and other entrepreneurs
started building practical aircraft, the federal
government began to support the airline
industry. President Wilson’s postmaster general introduced the world’s first regular airmail
service in 1918 by hiring pilots to fly mail
between Washington, D.C., and New York. In
1919 the Post Office expanded airmail service
across the continent.
The aviation industry received an economic
boost in 1925 when Congress passed the Kelly
Act, authorizing postal officials to contract
with private airplane operators to carry mail.
The following year Congress passed the Air
Commerce Act, which provided federal aid for
building airports. Former airmail pilot Charles
Lindbergh made an amazing transatlantic
solo flight in 1927, showing the possibilities of
commercial aviation. By the end of 1928, 48
airlines were serving 355 American cities.
The Radio Industry
In 1913 Edwin Armstrong, an American
engineer, invented a special circuit that made it
practical to transmit sound via long-range
radio. The radio industry began a few years
later. In November 1920 the Westinghouse
Company broadcast the news of Harding’s
landslide election victory from station KDKA
in Pittsburgh—one of the first public broadcasts in history. That success persuaded
Westinghouse to open other stations.
In 1926 the National Broadcasting Company
(NBC) set up a network of stations to broadcast daily programs. By 1927, almost 700 stations dotted the country. Sales of radio
equipment grew from $12.2 million in 1921 to
$842.5 million in 1929, by which time 10 million radios were in use across the country.
In 1928 the Columbia Broadcasting System
(CBS) assembled a coast-to-coast network of
stations to rival NBC. The two networks sold
advertising time and hired musicians, actors,
and comedians from vaudeville, movies, and
the nightclub circuit to appear on their shows.
Americans experienced the first presidential
election campaign to use radio broadcasts in
1928, when the radio networks sold more than
$1 million in advertising time to the Republican
and Democratic Parties.
Analyzing How did the automobile change the way people lived?
372 Chapter 10 The Jazz Age
The Granger Collection, New York
The Consumer Society
MAIN Idea Consumer credit and advertising
helped to create a nation of consumers.
HISTORY AND YOU Have you ever purchased
something on credit or bought an item because of
advertising? Read to discover the beginnings of the
widespread consumer culture in America.
Higher wages and shorter workdays resulted
in a decade-long buying spree that kept the
economy booming. Shifting from traditional
attitudes of thrift and prudence, Americans in
the 1920s enthusiastically accepted their new
role as consumers.
Easy Consumer Credit
One notable aspect of the economic boom
was the growth of individual borrowing. Credit
had been available before the 1920s, but most
Americans had considered debt shameful.
Now, however, attitudes toward debt started
changing as people began believing in their
ability to pay their debts over time. Many
Advertising to Consumers
The early advertising age used techniques that
continue to persuade consumers today. Easy credit
terms and installment plans, envy of peers and
neighbors, and the link of a product with a
famous, attractive person all convinced people
that they needed the flood of newly available
consumer goods.
listened to the sales pitch “Buy now and pay
in easy installments,” and racked up debts.
Americans bought 75 percent of their radios
and 60 percent of their automobiles on the
installment plan. Some started buying on
credit at a faster rate than their incomes
increased.
ing: “Just one thing to do and it’s ready to
serve.” Advertisers also preyed on consumers’
fears and anxieties, such as jarred nerves due
to the hectic pace of modern life or insecurities
about one’s status or weight.
Mass Advertising
By the early 1920s, many industries had
begun to create modern organizational structures. Companies were split into divisions with
different functions, such as sales, marketing,
and accounting. To run these divisions, businesses needed to hire managers. Managers
freed executives and owners from the day-today running of the companies.
The managerial revolution in companies
created a new career—the professional manager. The large numbers of new managers
helped expand the size of the middle class,
which in turn added to the nation’s prosperity.
Similarly, so many companies relied on new
technology that engineers were also in very
high demand. They, too, joined the ranks of the
growing middle class.
When inventor Otto Rohwedder developed
a commercial bread slicer in 1928, he faced a
problem common to new inventions: the
invention—sliced bread—was something no
one knew was needed. To attract consumers,
manufacturers turned to advertising, another
booming industry in the 1920s.
Advertisers linked products with qualities
associated with the modern era, such as progress, convenience, leisure, success, and style. In
a 1924 magazine advertisement for deodorant,
the headline read, “Flappers they may be—but
they know the art of feminine appeal!” An
advertisement for a spaghetti product told
homemakers that heating is the same as cook-
The Managerial Revolution
19
33
19
31
19
29
19
27
19
25
19
23
$8.0
$7.0
$6.0
$5.0
$4.0
$3.0
$2.0
19
21
By promising long-term
savings and offering
30-day free trials,
advertisers were often
able to get consumers
to try their products.
Consumer Debt
(billions of dollars)
Growth of Consumer Debt, 1920 –1933
Year
Source: Historical Statistics of the United States.
This 1928 advertisement appeals to
“expert opinion” to sell the product.
It also shows that 1920s advertisers
believed ironing to be a woman’s job.
Easy credit terms
and installment
payment plans
encouraged consumers to purchase
goods, and often
put them further
into debt than they
could afford.
Analyzing VISUALS
1. Making Connections What techniques do advertisers
use today to sell automobiles?
2. Analyzing Visuals What happened to consumer debt
between 1921 and 1929? Why might this have happened?
Chapter 10 The Jazz Age 373
(l)Frank & Marie-Therese Wood, (r)The Granger Collection, New York
Welfare Capitalism
Middle-class Americans were not the only
members of the new consumer society.
Industrial workers also had more disposable
income, partly due to rising wages and partly
because many corporations introduced what
came to be called welfare capitalism. Companies allowed workers to buy stock, participate in profit sharing, and receive medical care
and pensions.
The Decline of Unions Benefits programs
also made unions seem unnecessary to many
workers. During the 1920s, unions lost both
influence and membership. Employers promoted the open shop—a workplace where
employees were not required to join a union.
With benefits covering some of their basic
needs, workers were able to spend more of
their income to improve their quality of life.
Many purchased consumer goods they previously could not afford.
Uneven Prosperity Not all Americans
shared in this economic boom. Thousands of
African Americans had factory jobs during
World War I. When servicemen returned from
the war, they replaced both African Americans
and women.
Native Americans were also excluded from
prosperity. Although granted citizenship in
1924, they were often isolated on reservations,
where there was little productive work.
The majority of immigrants to the United
States continued to come from Europe. Even
these people often found it difficult to find
work; most of them were farmers and factory
workers whose wages were pitifully low.
Many people in the Deep South were also
left out of the economic boom. The traditional
agricultural economic base eroded after the
war ended. Farmers in general failed to benefit
from the growth of the economy.
Analyzing How did advertisers
try to convince Americans to buy their products?
Average Hourly Earnings, 1929
Although many people benefited from the economic boom of the 1920s,
several groups did not share in the general prosperity, nor did all regions
of the country. Members of minority groups, newly arrived immigrants, and
farmers often struggled economically. During the 1920s, for example, laborers in manufacturing not only outnumbered farmers but also acquired three
times more actual wealth.
Earnings
Prosperity for Whom?
$0.50
$0.40
$0.30
$0.20
$0.10
0
0.47
0.47
0.45
0.31
Northeast Midwest
South
West
Source: Manpower in Economic Growth.
▲
Annual Earnings, 1920–1930
30
19
28
19
26
19
24
19
19
19
22
$1,600
$1,200
$800
$400
20
Earnings
For many African
Americans, including
this family in rural
Georgia, the 1920s was
a time of poverty, not
prosperity.
Year
Nonfarm Employees
Agricultural Employees
Source: Manpower in Economic Growth.
Analyzing VISUALS
1. Identifying In what region of the nation were hourly
wages lowest in 1929?
2. Analyzing What pattern characterizes the gap between
wages of farm and nonfarm employees during the 1920s?
374 Chapter 10 The Jazz Age
The Farm Crisis
MAIN Idea Increases in farm productivity and decreases in foreign
Section 2 REVIEW
markets led to lower prices for farmers.
HISTORY AND YOU Do you remember reading about the platform
of the Populist Party in the 1890s? Read to learn about farmers’ troubles
in the 1920s.
American farmers did not share in the prosperity of the 1920s.
On average, they earned less than one-third of the income of
workers in the rest of the economy. Technological advances in
fertilizers, seed varieties, and farm machinery allowed them to
produce more, but higher yields without a corresponding increase
in demand meant that they received lower prices. Between 1920
and 1921, corn prices dropped almost 19 percent, and wheat
went from $1.83 a bushel to $1.03. The cost of the improved
farming technology, meanwhile, continued to increase.
Changing Market Conditions
Many factors contributed to this “quiet depression” in
American agriculture. During the war, the government had urged
farmers to produce more to meet the great need for food supplies
in Europe. Many farmers borrowed heavily to buy new land and
new machinery to raise more crops. Sales were strong, prices
were high, and farmers prospered. After the war, however,
European farm output rose, and the debt-ridden countries of
Europe had little money to spend on American farm products.
Congress had unintentionally made matters worse when it passed
the Fordney-McCumber Act in 1922. This act raised tariffs dramatically in an effort to protect American industry from foreign
competition. By dampening the American market for foreign
goods, however, it provoked a reaction in foreign markets against
American agricultural products. Farmers in the United States
could no longer sell as much of their crops overseas, and prices
tumbled.
Helping Farmers
Some members of Congress tried to help the farmers sell their
surplus. Every year from 1924 to 1928, Senator Charles McNary
of Oregon and Representative Gilbert Haugen of Iowa proposed
the McNary-Haugen Bill, a plan in which the government would
boost farm prices by buying up surpluses and selling them, at a
loss, overseas.
Congress passed the bill twice, but President Coolidge vetoed
it both times. He argued that with money flowing to farmers
under this law, they would be encouraged to produce even greater
surpluses. American farmers remained mired in a recession
throughout the 1920s.
Synthesizing What factors led to the growing economic crisis in farming?
Vocabulary
1. Explain the significance of: mass production, assembly line, Model T, Charles
Lindbergh, welfare capitalism, open shop.
Main Ideas
2. Evaluating How did the automobile
affect American society?
3. Summarizing What factors led to the
new consumer society in the United States
during the 1920s?
4. Analyzing What conditions contributed
to the tough times farmers faced in the
early 1920s?
Critical Thinking
5. Big Ideas How did the availability of
credit change society?
6. Organizing Use a graphic organizer like
the one below to list some of the new
industries that grew in importance during
the 1920s.
New
Industries
7. Analyzing Visuals Study the Technology
& History on pages 370–371. How do
appliances, cars, and airplanes differ
today? How do you think new products
change society today?
Writing About History
8. Write an article for a contemporary newspaper analyzing the impact of Charles
Lindbergh’s transatlantic flight on the
development of aviation in the United
States and the world.
)JTUPSZ
0/-*/&
Study Central™ To review this section, go
to glencoe.com and click on Study Central.
375